FTSE 100 on track for good year, UK government sells more NatWest shares and Begbies’ joy is negative for UK business

“Despite the UK stock market having ground to a halt in recent weeks, there is no reason to panic. Year-to-date the FTSE 100 is up 4.4%. Annualised that would equate to an approximate 10% return, and if you add on 3% dividend yield, you’re looking at a potential 13% total return which is slightly better than one might expect from UK equities in a normal year. So far, so good,” says Russ Mould, Investment Director at AJ Bell.

“The week ahead is fairly quiet when it comes to corporates updating on trading, with only a few names in the retail, tech and utilities space standing out. That means market sentiment is likely to be driven by political and economic events, including any update on the US debt ceiling talks, UK inflation data and the minutes from the latest Federal Reserve interest rate meeting on Wednesday, as well as insight into durable goods orders and personal spending in the US at the end of the week.

“The UK government has sold another chunk of shares in NatWest but the fact it is still left holding 38.6% means there continues to be a big overhang for the stock, which is likely to remain the case for some time given the slow pace of selling down. After all, it’s been 15 years since the bank was bailed out by the government and the latter still owns more than a third of the company.

“A better-than-expected trading update from corporate restricting group Begbies Traynor is good news for its shareholders, but typically a negative sign for the state of UK business. It has reported an increase in liquidations and administrations which is a worry for the economy, so too is guidance from Begbies for further challenges to UK businesses.”

These articles are for information purposes only and are not a personal recommendation or advice.